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Rightsizing, Termination, and Retention

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Rightsizing the Organization (cont'd) ... Contingent workers provide a buffer for the organization. ... be voluntary or the organization may face legal problems. ... – PowerPoint PPT presentation

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Title: Rightsizing, Termination, and Retention


1
  • Rightsizing, Termination, and Retention

2
Rightsizing the Organization
  • Rightsizing
  • The process of monitoring and adjusting the
    composition of the organizations workforce to
    its optimal size
  • Organizations face a real challenge in managing
    the size of their workforces as a way to deal
    with their current needs and potential future
    economic realities.

3
Rightsizing the Organization (contd)
  • Some organizations rely on temporary workers or
    other contingent workers as a way of dealing with
    uncertainty.
  • Contingent workers provide a buffer for the
    organization.
  • When a more serious reduction in the workforce is
    needed, more extreme measures are necessary.

4
Planning for Declines and Early Retirement
  • When it is possible to plan systematically for a
    gradual decrease in the workforce, it may be
    possible to manage reduction through early
    retirements and natural attrition.
  • Incentives may be offered for early retirement.
  • Early retirement plans must be voluntary or the
    organization may face legal problems.

5
Strategies for Layoffs
  • Much of peoples reactions to layoffs are
    determined by perceptions of the justice involved
    in the layoff process.
  • People often react badly when they are told they
    will no longer have a job.
  • Some may decide to sue.

6
Three Types of Justice
  • Distributive justice
  • Perceptions that the outcomes a person faces are
    fair when compared to the outcomes faced by
    others
  • Procedural justice
  • Perceptions that the process used to determine
    the outcomes was fair
  • Interactional justice
  • The quality of the interpersonal treatment people
    receive when a decision is implemented

7
Legal Issues In Layoffs
  • If a layoff strategy produces disparate impact,
    legal actions can become problematic.
  • Decisions to lay off senior employees cannot be
    based on stereotypes about older workers and
    their ability to perform.
  • Strategies based on performance can be difficult
    to defend.
  • Large-scale layoffs must be announced in advance.

8
Is Downsizing Effective?
  • A recent study showed that employment downsizers
    had the lowest levels of return on assets over
    time and did poorly on stock price when compared
    with stable employers and asset downsizers.
  • Asset downsizers produced the greatest
    performance.
  • Other studies report negative effects on stock
    prices and other financial indexes as a result of
    downsizing.
  • Survivor syndrome can contribute to the total
    costs of layoffs.

9
Termination
  • Managing involuntary turnover
  • Despite recruiting, selection, training, and
    development activities, sometimes an employee
    does not perform up to acceptable standards or
    presents a disciplinary problem.
  • Organizations use disciplinary action in an
    attempt to convince the employee to improve
    his/her performance.

10
Progressive Discipline
  • Punishment
  • Following unacceptable behavior with some type of
    negative consequences
  • Discipline
  • The system of rules and procedures for how and
    when punishment is administered and how severe
    the punishment should be

11
Progressive Disciplinary Plans
  • Verbal warnings
  • Cautions conveyed orally to the employee
  • Written warnings
  • More formal warnings that are given to the
    employee in writing and become part of the
    employees permanent record
  • Suspension
  • Temporary layoff
  • Termination
  • Employee is fired

12
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13
Employment-at-Will
  • This view asserts that because an employee can
    terminate an employment relationship at anytime,
    the employer should have the same rights.
  • Employment-at-will states that an employer can
    terminate any employee at any time, for any
    reason (good or bad), or for no reason at all.
  • The key to successful termination of an employee
    is documentation.

14
Employee Retention
  • Job dissatisfaction is the feeling of being
    unhappy with ones job. It is a major cause of
    voluntary turnover.

15
A Model of the Turnover Process
16
Job Embeddedness
  • Some people stay on their jobs, even when they
    are unhappy and should leave. Other ties in the
    community or obligations keep the employee on the
    job.

17
Causes of Job Dissatisfaction
18
The Effects of Job Dissatisfaction
  • Organizational commitment
  • The degree to which an employee identifies with
    an organization and is willing to exert effort on
    behalf of the organization
  • Organizational citizenship behaviors (OCBs)
  • Employee behaviors that are beneficial to the
    organization but are not formally required as
    part of an employees job

19
Measuring and Monitoring Job Satisfaction
  • Monitoring is done primarily through the use of
    attitude surveys that are distributed to
    employees
  • The responses from these surveys are used to
    track changes in employees attitudes.
  • Other methods include direct measures of job
    satisfaction, and some include questions about
    the levels desired versus what is experienced.

20
Retention Strategies
  • Job enrichment
  • Realistic job previews (RJPs)
  • Pre-employment previews that provide accurate and
    realistic information to the job applicant. They
    can also be used with new employees as a means of
    socializing them in their new job roles, and they
    are effective in reducing turnover.
  • Stock options

21
Evaluating the Rightsizing Process
  • Continuous strategic planning should result in
    employment projections that allow the
    organization to address those projections in the
    most painless way.
  • When an unanticipated downturn occurs, an
    organization should conduct layoffs in ways that
    are compassionate.
  • Exit interviews with employees who leave
    voluntarily can provide insight into why
    employees quit.
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